Saturday, January 21, 2012

Market woes chip at super nest eggs

Of course if you had a SMSF and invested those funds in an asset who's value has never fallen to zero in the last 5,000 years your fund would have return in excess of 10% in 2011.


From The Sydney Morning Herald (

THE average Australian superannuation fund lost money in 2011 due to the sharemarket's poor performance, with analysts expecting a 2 per cent decrease in median ''balanced'' funds.

Conservative funds and cash funds - which allocate money to defensive assets such as fixed interest and bonds, where returns are normally lower - outperformed high-growth funds.

Paul Saliba, chief investment officer at wealth management firm Lachlan Partners, expects the outlook for 2012 to be similar to last year, with low-risk assets outperforming the sharemarket because of the risks facing the global economy.

''There is a clear risk for equity returns in a world of weak economic growth, deleveraging of both consumers and governments worldwide,'' he said.

The debt crisis in Europe was a ''dire risk'', he said, and ''unless something changes - and on all reports it's hard to see how it can change with any speed - then investors are going to be gun shy''.

While government bonds were the biggest gainers last year, Mr Saliba said corporate bonds should do well this year as people realised that ''companies are not going to fail en masse''.

According to superannuation research and consultancy firm Chant West, the negative super returns of 2011 compared with positive returns of 4.7 per cent in 2010 and 15 per cent in 2009, but were far better than losses of 21.5 per cent during the late-2008 global financial crisis.

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